Forum for Science, Industry and Business

Sponsored by:     3M 
Search our Site:


Ten years of strong adjustment for Finnish agriculture


The accession to the European Union (EU) ten years ago was for the Finnish agriculture and food sector an unprecedented rapid shift from closed and regulated markets to open and more competitive ones. Finnish farmers faced a change in output prices, relative prices and direct support which were of exceptional magnitude compared to that of any other country which had ever joined the EU. Commitment to the Common Agricultural Policy (CAP) lowered the producer price level in Finland by 40-50% right at the beginning of 1995.

On market prices alone, the survival of Finnish agricultural production would have been very difficult. A comprehensive package of compensatory payments was therefore agreed to facilitate the adjustment. Various forms of support payments have played a central role during these first ten years in the EU in ensuring that Finnish agriculture succeeded in common EU markets. In 2004, support payments rose to €1.8 billion, which was 45% of the total return on agriculture and horticulture (€3.97 billion).

Despite the growth in direct payments, agricultural income has been falling in Finland. According to figures from MTT Agrifood Research Finland, agricultural income at fixed prices was almost 34% lower in 2004 than in 1994.

Rapid progress in structural development

Membership of the EU has not lead to any significant changes in the volume of Finnish agricultural production. However, the structural development of agriculture has been very rapid. The number of farms has fallen by more than 3% a year, and those engaged in livestock production even more. For example, the number of farms specialising in milk production has decreased by almost 7% a year. There were over 100,000 farms in Finland in 1994. Now, ten years later, there are but about 71,000 farms left. “There are no indications that the structural change will be slowing down in the long term. On the contrary, trade liberalisation will continue to call for further concentration in the sector. By 2020, there will be less than 40,000 farms left” says Jyrki Niemi, an agricultural economist at MTT.

Even though the structure of Finnish agriculture has changed quite rapidly, the development of agricultural productivity has been relatively slow. In 2004, the same use of production inputs yielded about 12% more than in 1992, showing that productivity grew by a little under 1% a year. The new economic environment has not promoted agricultural productivity development as was expected.

Food prices have risen less than the other prices

The consumer price of food fell, on average, by 11% when Finland joined the EU in 1995. Between 1995 and 2004, food prices rose by 11% in nominal terms, while the general consumer price index rose by 13.4%, which means that food prices are below the level in 1995 in real terms.

Membership of the EU has clearly reinforced the position of the retail trade in the food chain relative to primary production and the food industry. The share of the retail sector in the consumer price of food has increased by a few percentage points in recent years.

Ulla Jauhiainen | alfa
Further information:

More articles from Agricultural and Forestry Science:

nachricht Forest Management Yields Higher Productivity through Biodiversity
14.10.2016 | Technische Universität München

nachricht Farming with forests
23.09.2016 | University of Illinois College of Agricultural, Consumer and Environmental Sciences (ACES)

All articles from Agricultural and Forestry Science >>>

The most recent press releases about innovation >>>

Die letzten 5 Focus-News des innovations-reports im Überblick:

Im Focus: New 3-D wiring technique brings scalable quantum computers closer to reality

Researchers from the Institute for Quantum Computing (IQC) at the University of Waterloo led the development of a new extensible wiring technique capable of controlling superconducting quantum bits, representing a significant step towards to the realization of a scalable quantum computer.

"The quantum socket is a wiring method that uses three-dimensional wires based on spring-loaded pins to address individual qubits," said Jeremy Béjanin, a PhD...

Im Focus: Scientists develop a semiconductor nanocomposite material that moves in response to light

In a paper in Scientific Reports, a research team at Worcester Polytechnic Institute describes a novel light-activated phenomenon that could become the basis for applications as diverse as microscopic robotic grippers and more efficient solar cells.

A research team at Worcester Polytechnic Institute (WPI) has developed a revolutionary, light-activated semiconductor nanocomposite material that can be used...

Im Focus: Diamonds aren't forever: Sandia, Harvard team create first quantum computer bridge

By forcefully embedding two silicon atoms in a diamond matrix, Sandia researchers have demonstrated for the first time on a single chip all the components needed to create a quantum bridge to link quantum computers together.

"People have already built small quantum computers," says Sandia researcher Ryan Camacho. "Maybe the first useful one won't be a single giant quantum computer...

Im Focus: New Products - Highlights of COMPAMED 2016

COMPAMED has become the leading international marketplace for suppliers of medical manufacturing. The trade fair, which takes place every November and is co-located to MEDICA in Dusseldorf, has been steadily growing over the past years and shows that medical technology remains a rapidly growing market.

In 2016, the joint pavilion by the IVAM Microtechnology Network, the Product Market “High-tech for Medical Devices”, will be located in Hall 8a again and will...

Im Focus: Ultra-thin ferroelectric material for next-generation electronics

'Ferroelectric' materials can switch between different states of electrical polarization in response to an external electric field. This flexibility means they show promise for many applications, for example in electronic devices and computer memory. Current ferroelectric materials are highly valued for their thermal and chemical stability and rapid electro-mechanical responses, but creating a material that is scalable down to the tiny sizes needed for technologies like silicon-based semiconductors (Si-based CMOS) has proven challenging.

Now, Hiroshi Funakubo and co-workers at the Tokyo Institute of Technology, in collaboration with researchers across Japan, have conducted experiments to...

All Focus news of the innovation-report >>>



Event News

#IC2S2: When Social Science meets Computer Science - GESIS will host the IC2S2 conference 2017

14.10.2016 | Event News

Agricultural Trade Developments and Potentials in Central Asia and the South Caucasus

14.10.2016 | Event News

World Health Summit – Day Three: A Call to Action

12.10.2016 | Event News

Latest News

Resolving the mystery of preeclampsia

21.10.2016 | Health and Medicine

Stanford researchers create new special-purpose computer that may someday save us billions

21.10.2016 | Information Technology

From ancient fossils to future cars

21.10.2016 | Materials Sciences

More VideoLinks >>>